Jetstar introduces 1% credit card booking fee

By David Flynn, August 31 2016

Jetstar travellers will pay up to 1.06% of their airfare as a credit card booking fee from September 1.

Qantas' low-cost sibling is the latest airline to switch from flat fees to a percentage-based system, in line with new rules set by the Australian Competition and Consumer Commission and the Reserve Bank.

In place of Jetstar's previous 'booking and service fee' of $8.50 for domestic flights and $8.50 to $12.50 for international flights, passengers will now pay the following percentage of their ticket as a booking fee

  • 1.06% for credit cards (including Visa, MasterCard, American Express and Diners)
  • 0.75% for PayPal
  • 0.48% for debit cards

Tickets purchased with a Jetstar MasterCard, Jetstar Platinum MasterCard or POLi won't attract any booking fee.

Unlike the surcharge caps imposed by Qantas and Virgin Australia – which limit fees to $11 for domestic and trans-Tasman fares and $70 for international tickets, Jetstar's percentage-based booking fees will be uncapped.

This means the average $1,200 business class fare on Jetstar's Boeing 787 to Tokyo, for example, will attract around a $12 booking fee.

"The majority of Jetstar customers will pay less in fees than they currently do, and there’ll continue to be fee-free options for customers who prefer not to pay with a credit card" a Jetstar spokesman told Australian Business Traveller.

Also read: Five ways to avoid the Qantas credit card booking surcharge

Follow Australian Business Traveller on Twitter: we're @AusBT

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Qantas - Qantas Frequent Flyer

25 May 2012

Total posts 582

So, putting aside the ability to earn points and the travel insurance, to justify the annual card fee you now need to spend over $5500 in Jetstar bookings on the entry level Jetstar Mastercard ($59/yr), and over $14,000 in Jetstar bookings on the Platinum card ($149/yr).

Ughhh... that's a lot of flying Jetstar.

QFF

12 Apr 2013

Total posts 1446

Platinum JetStar branded card earns 1 QFF point per dollar and offer plenty of perks, thus IMHO it is great value as is and no booking fee with JetStar just a boon :-))))

Qantas - Qantas Frequent Flyer

25 May 2012

Total posts 582

To each their own, but there are far better cards on the market.

QFF

12 Apr 2013

Total posts 1446

You are wrong, as least from maximizing QFF points POV so to say. Tell me please what you believe is “far better”. Please do not include AMEX (i.e. Visa and Master only) – they not accepted everywhere.

The topic here is Jetstar's new 1% credit card fee, not the best credit card for earning Qantas frequent flyer points.

Please keep discussion here to the topic at hand, although this would be a great discussion to have in the Q&A area. :)

QFF

12 Apr 2013

Total posts 1446

Hey, Chris, then perhaps it is great idea to write an article “The best credit cards to earn QFF points” and open discussion there? I just finished reorganizing my credit cards and my main objective was maximizing QFF points and believe me it is not that easy and/or straightforward.

Published in March – feel free to discuss there or in the Q&A where more people may see your post. :)

Virgin Australia - Velocity Rewards

19 Feb 2014

Total posts 451

Seeing as the vast majority of the fares are below $850, this is definitely a [small] win for the flying public.

Qantas - Qantas Frequent Flyer

26 May 2014

Total posts 405

The credit card fee for Visa is exactly twice the rate as that shown on the electricity account I just paid.  I would have expected Qantas group to have the best possible rate from the banks on the basis of turnover.

18 Apr 2015

Total posts 68

Having seen merchant statements for a decent sized entity, I was surprised by the extent of variation in merchant fees based on the ACTUAL CARD used. Some premium Visa and Mastercards can reach close to 2%, and not too far off Amex. I think just over 1% is extremely fair. And in the case of your electricity, I suspect they are subsidising part of the fee (although large entities probably do negotiate somewhat better rates).

23 Feb 2016

Total posts 34

My understanding is that these booking fee changes were introduced due to the ban on excessive credit card charges.

What is defined as excessive? Are they allowed to profit from customers under the shroud of a fee that they are just passing on to the consumer?

Qantas - Qantas Frequent Flyer

26 Sep 2014

Total posts 49

'Excessive' came into play where companies were making a profit on CC fees. For example, and with an arbitury number, for a Visa/MC CC transaction the bank would charge a company 1.0, however the company would pass the fee on to the cponsumer at a rate of 2.3%. 

From a SMH articleConsumer advocacy group Choice  found that the Qantas $7 card surcharge on a cheap flight was 348 per cent more than the likely cost of the transaction ($1.56), while Jetstar's $8.50 surcharge accounted for a mark-up of 1187 per cent on the likely cost  of 66 cents.

24 Dec 2013

Total posts 84

1.06% is such an odd fee. Why not round it down to 1%?

27 Jan 2016

Total posts 53

It all adds up - say they transact $1b worth of credit card transactions, that 0.06% equates to 600k in revenue. In terms of cost recovery it is pretty significant.

Qantas - Qantas Frequent Flyer

20 Mar 2014

Total posts 33

According to Jetstar's Fees and Charges page, the new fee structure applies if your first flight in your booking is operated by a flight with a JQ flight number (i.e. Jetstar Australia, etc.)

If your first flight is operated by a 3K flight number (i.e. Jetstar Asia), the previous fee structure still applies.

Air New Zealand - Airpoints

21 Jan 2016

Total posts 162

Personally I can not understand why the consumer has to pay for Jetstar merchant fee or in fact any airline Visa/Mastercard/Amex/Diners Club merchant fees.  To me, its another way to earn extra income.  Qantas Group probarly has a merchant fee of .75% for Visa/Mastercard and 1.5% for Amex and Diners Club for all its group operations.  If a business accepts electronic cards for payments, the merchant fee is a cost of doing business likes rent, wages, advertisng, etc. I hate paying electronic card surcharges. Grrr


Hi Guest, join in the discussion on Jetstar introduces 1% credit card booking fee